Apple's iPhone with WiFi to Finally Arrive in China

The Apple (AAPL) iPhones sold in China by China Unicom (CHU), the U.S. company's carrier partner, do not come with WiFi. The wireless capability has helped sales of the iPhone in the U.S. and other markets, but China banned the function because it hoped to create competition to WiFi with its own standard.

The regulations have changed, however, and China Unicom announced that it will begin to offer an Apple iPhone that operates with WiFi as early as Monday. According to the Associated Press, "Unicom will sell eight-gigabyte iPhones with third-generation service and WiFi throughout China." Apple's 16- and 32-gigabyte models will still not work with WiFi in China, at least not yet.

The Ministry of Industry and Information Technology said that in May the number of cellphones in use in the world's most populous nation rose to 1.1 billion. It is not clear how many of these devices use paid carrier services because many handsets are "unlocked" and work on multiple systems.

Apple must still face the problem that many iPhones are sold on the black market; a number of companies also make counterfeit iPhones. Unicom sold only 5,000 iPhones the first week the product was offered in late 2009. The pace accelerated, however, and by the end of last year, Unicom's sales were up to 100,000

The new WiFi service may help iPhone sales in China, but black market versions are likely to erode the product's adoption.